How to invest in Japan using ETFs

How do I invest in Japanese stocks?

The easiest way to invest in the whole Japanese stock market is to invest in a broad market index. This can be done at low cost by using ETFs.

On the Japanese stock market you find 6 indices, which are tracked by ETFs. Besides these indices 2 alternative indices on small and mid caps or equity strategies can be considered.

A speciality for ETFs on Japan is the large number of currency hedged ETFs that are available. In total there are 6 currency hedged indices tracked by 18 ETFs.

Alternatively, you can consider indices on the Pacific region. In the Pacific indices, Japan is strongly weighted with around 67%.

0.09% p.a. - 0.59% p.a.
annual total expense ratio (TER) of Japan ETFs
on the Japanese stock market, which are tracked by ETFs
on the Japanese stock market
The best indices for Japan ETFs

Performance of Japanese stocks (MSCI Japan)

1 month: 0.62%
1 year: 11.48%
3 years: 58.86%
5 years: 63.14%

Indices in comparison

The best indices for ETFs on Japan

For an investment in the Japanese stock market, 6 indices tracked by 19 ETFs are available. On the FTSE Japan index there is 1 ETF. On the JPX-Nikkei 400 index there are 4 ETFs. On the MSCI Japan index there are 9 ETFs. On the MSCI Japan Investable Market (IMI) index there is 1 ETF. On the Nikkei 225® index there are 2 ETFs. On the TOPIX® index there are 2 ETFs. The total expense ratio (TER) of ETFs on these indices is between 0.09% p.a. and 0.59% p.a..

Index Investment focus Number of ETFs Number of constituents Short description

FTSE Japan

Japan 1 ETF 509
(31/08/18)
The FTSE Japan index tracks Japanese large and mid cap stocks.
Index factsheet

JPX-Nikkei 400

Japan 4 ETFs 400
The JPX-Nikkei 400 index tracks 400 Japanese stocks. The stocks are mainly selected by return on equity and cumulative operating profit.
Index factsheet

MSCI Japan

Japan 9 ETFs 322
(31/08/18)
The MSCI Japan (total return) index tracks around 320 leading stocks on the Japanese market.
Index factsheet

MSCI Japan Investable Market (IMI)

Japan 1 ETF 1,283
(31/08/18)
The MSCI Japan Investable Market (IMI) index tracks large, mid, and small capitalisation companies in Japan.
Index factsheet

Nikkei 225®

Japan 2 ETFs 225
The Nikkei 225® index tracks the 225 most actively traded stocks on the first section of the Tokyo Stock Exchange.
Index factsheet

TOPIX®

Japan 2 ETFs 2,008
(31/03/18)
The TOPIX® (total return) index tracks over 2,000 Japanese stocks on the TSE First Section segment of the Tokyo Stock Exchange, which comprises the largest market capitalisations.
Index factsheet
ETF
ISIN
  Fund size
in m GBP
TER
in %
Use of profits Fund domicile Replication method
iShares Core MSCI Japan IMI UCITS ETFIE00B4L5YX21 2,851 0.20% p.a. Accumulating Ireland Optimized sampling
Xtrackers MSCI Japan Index UCITS ETF 1CLU0274209740 1,761 0.30% p.a. Accumulating Luxembourg Full replication
Vanguard FTSE Japan UCITS ETFIE00B95PGT31 1,701 0.19% p.a. Distributing Ireland Full replication
iShares MSCI Japan UCITS ETF (Dist)IE00B02KXH56 1,239 0.59% p.a. Distributing Ireland Optimized sampling
Lyxor Japan (Topix) UCITS ETF D-EURFR0010245514 829 0.45% p.a. Distributing France Full replication
UBS ETF (LU) MSCI Japan UCITS ETF (JPY) A-disLU0136240974 706 0.35% p.a. Distributing Luxembourg Full replication
Xtrackers Nikkei 225 UCITS ETF 1DLU0839027447 623 0.09% p.a. Distributing Luxembourg Full replication
iShares MSCI Japan UCITS ETF (Acc)IE00B53QDK08 390 0.48% p.a. Accumulating Ireland Full replication
Lyxor JPX-Nikkei 400 (DR) UCITS ETF C-EURLU1646359452 305 0.25% p.a. Accumulating Luxembourg Full replication
Source JPX-Nikkei 400 UCITS ETF AIE00BPRCH686 190 0.19% p.a. Accumulating Ireland Unfunded swap
Xtrackers JPX-Nikkei 400 UCITS ETF 1DIE00BPVLQD13 183 0.20% p.a. Distributing Ireland Optimized sampling
HSBC MSCI Japan UCITS ETF USDIE00B5VX7566 168 0.19% p.a. Distributing Ireland Full replication
iShares Nikkei 225 UCITS ETF (Acc)IE00B52MJD48 158 0.48% p.a. Accumulating Ireland Full replication
Amundi ETF Japan Topix UCITS ETF - JPYLU1681037781 99 0.20% p.a. Accumulating Luxembourg Unfunded swap
Amundi ETF JPX Nikkei 400 UCITS ETF - JPYLU1681039050 98 0.18% p.a. Accumulating Luxembourg Unfunded swap
Lyxor Core MSCI Japan (DR) UCITS ETFLU1781541252 15 0.12% p.a. Accumulating Luxembourg Full replication
Source MSCI Japan UCITS ETF AIE00B60SX287 11 0.19% p.a. Accumulating Ireland Unfunded swap
Amundi ETF MSCI Japan UCITS ETF DR - JPYLU1602144815 7 0.45% p.a. Accumulating Luxembourg Full replication
SPDR MSCI Japan UCITS ETFIE00BZ0G8B96 3 0.30% p.a. Accumulating Ireland Optimized sampling
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
MSCI Japan Investable Market (IMI) 1.36% 0.27% 1.54% 7.59% 54.00%
MSCI Japan 1.51% 0.71% 1.67% 7.64% 49.70%
TOPIX® 1.08% -0.01% 1.27% 7.66% 52.91%
FTSE Japan 1.44% 0.56% 1.75% 7.89% 51.99%
Nikkei 225® 3.43% 4.22% 7.37% 16.88% 64.95%
JPX-Nikkei 400 1.01% -0.01% 1.43% - -
Index   2018
in %
2017
in %
2016
in %
2015
in %
2014
in %
MSCI Japan 1.91% 13.17% 22.75% 13.80% 1.11%
TOPIX® 2.01% 14.28% 23.69% 15.78% 1.45%
JPX-Nikkei 400 2.03% - - - -
MSCI Japan Investable Market (IMI) 2.18% 13.97% 24.23% 15.99% 1.50%
FTSE Japan 2.35% 13.61% 23.24% 16.25% 1.99%
Nikkei 225® 6.81% 14.96% 26.39% 15.28% 1.39%

Source: justETF.com; As of 31/08/18; Calculations in GBP based on the largest ETF of the respective index.

 

The cheapest Japan ETFs
by total expense ratio (TER)

Show all

Japan ETFs with hedged currency risk

Currency hedged investing in Japanese stocks is popular. In total, you can consider 6 currency hedged Japan indices tracked by 18 ETFs. The total expense ratio (TER) of ETFs on Japan indices with currency hedge is between 0.18% p.a. and 0.64% p.a..

 
Index Investment focus Number of ETFs Number of constituents Short description
JPX-Nikkei 400 (EUR Hedged) Japan 2 ETFs 400
The JPX-Nikkei 400 Daily EUR Hedged index tracks 400 Japanese stocks. The stocks are mainly selected by return on equity and cumulative operating profit. Daily currency hedged to Euro.
Index factsheet
JPX-Nikkei 400 (GBP Hedged) Japan 3 ETFs 400
The JPX-Nikkei 400 Daily GBP Hedged index tracks 400 Japanese stocks. The stocks are mainly selected by return on equity and cumulative operating profit. Daily currency hedged to GBP.
Index factsheet
JPX-Nikkei 400 (USD Hedged) Japan 5 ETFs 400
The JPX-Nikkei 400 USD Hedged index tracks 400 Japanese stocks. The stocks are mainly selected by return on equity and cumulative operating profit. Currency hedged to US dollar.
Index factsheet
MSCI Japan (EUR Hedged) Japan 2 ETFs 322
(31/08/18)
The MSCI Japan index tracks around 320 leading stocks on the Japanese market. 100% currency hedged to Euro.
Index factsheet
MSCI Japan (GBP Hedged) Japan 4 ETFs 322
(31/08/18)
The MSCI Japan (total return) index tracks around 320 leading stocks on the Japanese market. 100% currency hedged to British Pound (GBP).
Index factsheet
MSCI Japan (USD Hedged) Japan 2 ETFs 322
(31/08/18)
The MSCI Japan index tracks around 320 leading stocks on the Japanese market. Currency hedged on monthly basis to US dollar.
Index factsheet
ETF
ISIN
  Fund size
in m GBP
TER
in %
Use of profits Fund domicile Replication method
iShares MSCI Japan EUR Hedged UCITS ETF (Acc)IE00B42Z5J44 1,754 0.64% p.a. Accumulating Ireland Optimized sampling
iShares MSCI Japan USD Hedged UCITS ETF (Acc)IE00BCLWRG39 395 0.64% p.a. Accumulating Ireland Optimized sampling
Xtrackers MSCI Japan Index UCITS ETF 2D (USD hedged)LU0927735406 334 0.40% p.a. Distributing Luxembourg Full replication
Source JPX-Nikkei 400 UCITS ETF USD HedgedIE00BVGC6751 211 0.19% p.a. Accumulating Ireland Unfunded swap
iShares MSCI Japan GBP Hedged UCITS ETF (Acc)IE00B7XYN974 187 0.64% p.a. Accumulating Ireland Optimized sampling
Amundi ETF JPX Nikkei 400 UCITS ETF Daily Hedged USDLU1681039217 77 0.18% p.a. Accumulating Luxembourg Unfunded swap
UBS ETF MSCI Japan UCITS ETF (hedged to GBP) A-disLU1169822340 72 0.45% p.a. Distributing Luxembourg Full replication
Xtrackers MSCI Japan Index UCITS ETF 6C (GBP hedged)LU0659580236 58 0.40% p.a. Accumulating Luxembourg Full replication
Nomura JPX-Nikkei 400 NTR D EUR Hedged UCITS ETFIE00BVVSZ262 52 0.30% p.a. Accumulating Ireland Full replication
iShares JPX-Nikkei 400 EUR Hedged UCITS ETFIE00BQT3W831 50 0.25% p.a. Accumulating Ireland Optimized sampling
Lyxor JPX-Nikkei 400 (DR) GBP Daily Hedged UCITS ETFLU1646359619 47 0.25% p.a. Accumulating Luxembourg Full replication
Lyxor JPX-Nikkei 400 (DR) USD Daily Hedged UCITS ETFLU1646359882 46 0.25% p.a. Accumulating Luxembourg Full replication
UBS ETF MSCI Japan UCITS ETF (hedged to GBP) A-accLU1169822423 30 0.45% p.a. Accumulating Luxembourg Full replication
Xtrackers JPX-Nikkei 400 UCITS ETF 4C (USD hedged)IE00BTGD1B38 12 0.30% p.a. Accumulating Ireland Optimized sampling
Xtrackers JPX-Nikkei 400 UCITS ETF 2D (GBP hedged)IE00BPVLQF37 12 0.30% p.a. Distributing Ireland Optimized sampling
Nomura JPX-Nikkei 400 NTR D USD Hedged UCITS ETFIE00BVVSZ379 11 0.30% p.a. Accumulating Ireland Full replication
SPDR MSCI Japan EUR Hedged UCITS ETFIE00BZ0G8C04 3 0.35% p.a. Accumulating Ireland Optimized sampling
Amundi ETF JPX Nikkei 400 UCITS ETF Daily Hedged GBPLU1681039308 3 0.18% p.a. Accumulating Luxembourg Unfunded swap
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
JPX-Nikkei 400 (EUR Hedged) -0.64% 1.38% -0.06% 5.12% 36.97%
MSCI Japan (EUR Hedged) -0.22% 2.19% 0.36% 5.77% 37.36%
MSCI Japan (GBP Hedged) -0.71% 0.12% -0.52% 9.26% 11.55%
JPX-Nikkei 400 (USD Hedged) 0.39% 2.79% 6.52% 9.50% 40.94%
MSCI Japan (USD Hedged) 0.79% 3.37% 6.68% 10.05% 38.82%
JPX-Nikkei 400 (GBP Hedged) -1.06% -0.56% -1.00% - -
Index   2018
in %
2017
in %
2016
in %
2015
in %
2014
in %
JPX-Nikkei 400 (GBP Hedged) -3.87% - - - -
JPX-Nikkei 400 (EUR Hedged) -3.42% 23.40% 13.31% - -
MSCI Japan (GBP Hedged) -3.38% 19.26% -3.90% 8.63% 8.30%
MSCI Japan (EUR Hedged) -2.85% 22.84% 12.98% 2.73% 0.88%
JPX-Nikkei 400 (USD Hedged) 1.41% 10.70% 19.79% - -
MSCI Japan (USD Hedged) 2.01% 9.96% 18.11% 14.50% 14.27%

Source: justETF.com; As of 31/08/18; Calculations in GBP based on the largest ETF of the respective index.

 
Alternative investment opportunities

Japanese indices on small and mid caps or equity strategies

Alternatively, you may invest in indices on small and mid caps or equity strategies. In total, you can invest in 2 alternative indices on Japan tracked by 2 ETFs. The total expense ratio (TER) of ETFs on these alternative indices is between 0.30% p.a. and 0.58% p.a..

 
Index Investment focus Number of ETFs Number of constituents Short description
MSCI Japan SRI Japan
Social/Environmental
1 ETF 63
(31/08/18)
The MSCI Japan SRI index tracks Japanese stocks considering only companies with very high Environmental, Social and Governance (ESG) ratings relative to their sector peers, to ensure the inclusion of the best of class companies from an ESG perspective.
Index factsheet
MSCI Japan Small Cap Japan
Small Cap
1 ETF 961
(31/08/18)
The MSCI Japan Small Cap (total return) index tracks Japanese small cap stocks.
Index factsheet
ETF
ISIN
  Fund size
in m GBP
TER
in %
Use of profits Fund domicile Replication method
iShares MSCI Japan Small Cap UCITS ETF (Dist)IE00B2QWDY88 520 0.58% p.a. Distributing Ireland Optimized sampling
iShares MSCI Japan SRI UCITS ETFIE00BYX8XC17 34 0.30% p.a. Accumulating Ireland Full replication
 
Index   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
MSCI Japan Small Cap 0.65% -1.91% 0.53% 6.24% 69.65%
MSCI Japan SRI 2.51% 1.81% 3.93% 8.43% -
Index   2018
in %
2017
in %
2016
in %
2015
in %
2014
in %
MSCI Japan Small Cap 1.24% 19.18% 29.07% 20.68% 5.18%
MSCI Japan SRI 3.93% - - - -

Source: justETF.com; As of 31/08/18; Calculations in GBP based on the largest ETF of the respective index.

 

Pacific indices with a large share of Japan

Besides, Japan ETFs you can consider ETFs on the Pacific stock market. On the Pacific region 6 indices tracked by 18 ETFs are available. The MSCI Pacific index contains a significant weight of Japan with around 67%. The total expense ratio (TER) of ETFs on the Pacific region is at -.

 
 
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